By the mid-18th century Britain was living through the world's first industrial revolution: looms had moved from water power to steam, and cities like Glasgow and Manchester were plugged into a global trading network. The dominant economic policy was mercantilism — the state protected exports, restricted imports, and kept colonies dependent on the mother country. Adam Smith taught moral philosophy at the University of Glasgow; after his 1759 'Theory of Moral Sentiments', he spent seventeen years systematically studying commercial life. On 9 March 1776, four months before the American Declaration of Independence, 'The Wealth of Nations' was published in London.

The book made three central claims. First: the wealth of a nation is not accumulated gold but the goods and services it produces, and the strongest lever of productivity is the division of labour — as in Smith's famous pin-factory example. Second: when individuals pursue their own interest they are, as if by 'an invisible hand', often led to advance the public good as well; market competition performs a coordinating function the state cannot. Third: mercantilist restrictions — tariffs, monopolies, forced colonial trade — misallocate resources, whereas free trade raises both productivity and welfare. Combined with John Locke's 1689 'Two Treatises of Government' and its conception of property and natural rights, these three theses formed the backbone of classical liberalism: rule of law, limited government, freedom of contract, individual initiative.

The impact was rapid and deep. Across the 19th century Britain translated Smith's thesis into policy: the 1846 repeal of the Corn Laws was the symbolic victory of free trade. In the United States the book became the founding generation's economic reference. Industrial capitalism — the factory, the joint-stock company, the stock exchange, wage labour — accelerated extraordinarily within this frame. In 1859 John Stuart Mill's 'On Liberty' carried classical liberalism to its ethical apex by defending the individual's right to do anything that did not harm others. In the 20th century Hayek, Friedman and the neoliberal school would reinterpret Smith; critics — Marx, Polanyi, Keynes, Sen — would pull his legacy in different directions.

The legacy reads in complicated ways today. Smith was not in fact a dogmatic market apologist: in the same book he wrote that merchants 'seldom meet together' without conspiring against the public, criticised the injustice of colonial trade, and defended state spending on education and public infrastructure. Yet contemporary critics rightly point to two tensions: Locke's involvement in drafting the Carolina constitution that legitimised slavery, and the fact that Smith underweighted distribution while his free-labour model operated simultaneously with the exploitation of the Atlantic slave trade. For these reasons 1776 is read both as 'the modern doctrine of individual freedom' and as 'a legacy that has carried its contradictions into the present' — even Mill's 1859 synthesis is best understood inside that tension.